I like simplicity.
The reason I like simplicity is because it's really hard to scam somebody or lie when things are kept simple. It is complexity wherein politicians and criminals work their ways to get your money out of your hands legally.
The most obvious example of this is our complex tax system. 16,000 pages plus for the tax code and now that I'm working on bankruptcies and asset recovery I am reminded as to just how complex politicians have made taxes ON PURPOSE. They also make it so you don' t know you're being bled. Much like leeches will soothe your skin with an anesthetic before they start to suck out your blood, politicians have made it so you don't even realize how much you're paying in taxes with the PAYGO system.
But the single worst aspect of this complex tax system is not the loopholes that benefit a few connected people, nor is it the fact we have to waste the equivalent of 2 weeks per year complying with this horrendously complex tax code, nor is it the loss of production that labor could have been spent doing otherwise.
No, the single LARGEST COST to the complex tax system is simply the lack of....
"Pricing?" you say.
"Yes, pricing," I answer.
Understand that government has a price. It has a cost. And that cost is the price we pay in taxes.
The problem is that since we have so many taxes and so many fees at so many different levels, that nobody really knows what the final price tag of the government is. This is HORRIBLE in that without knowing the price of something, you can't tell for sure whether it's worth what you're getting in return.
A Big Mac is very simple. I know it costs about $4. And therefore, before I spend my $4 I can COMPARE the PRICE against the EXPECTED BENEFIT. MW3 is very simple. I know it costs $60 and can COMPARE THE PRICE AGAINST THE EXPECTED BENEFIT.
But with government you can't do that. Because nobody, bar some really anal-retentive accountants, can tell you what price you are personally paying for government.
Now, super-awesome economists such as myself kindly and regularly calculate "government spending as a percent of GDP." This is to show the people "hey, this is what we're paying for the government we got."
THere's just one small problem.
98% of the American adult population doesn't know what "GDP" stands for, let alone the merit of dividing government spending by it. They wouldn't be able to understand what that number signifies. Besides, it's getting in the way of their love affair with Kim Kardashian's wedivorce.
But it is here that the true argument for a flat sales tax lays.
A flat sales tax does four things.
1. It consolidates ALL the various government taxes into ONE SINGLE TAX. More specifically, ONE SINGLE NUMBER everybody can understand, and in doing so puts a VERY SPECIFIC PRICE ON GOVERNMENT. Because all government revenue would be derived from ONE single tax, any cries or demands from the people to "pay for the chilllllllldreeeeeen" or "bailing out Banksters" or "free food" or "social security" or "wars here and there" would immediately and quite accurately drive up that ONE SINGLE NUMBER, so you could see how much "paying for free college education" would cost.
"The starting tax rate is 20%. Oh, you want free health care? The new tax rate is 24.7% Oh, you also want to subsidize loser solar companies? The new new tax rate is now 25.1%. Oh, you want to bail out the banking industry? The new new NEW tax rate is 32%"
People would know PRECISELY how much government would cost and would therefore allow them to determine whether they were getting their bang for their buck.
2. It forces people to have skin in the game so they cannot rob Peter to pay themselves. If they want free food for their 4 illegitimate children, then they get to pay an extra 1% in sales tax on everything they buy. They want to have free education? They get to share some of that burden. And in doing so...
3. It unifies the people. Instead of pitting them against one another, the poor vs. the rich, the old vs. the young, the children vs the childrenless, doesn't matter. You're all in the same boat, you all pay the same price. You can no longer vote to tax one group of people or grant others a "credit" or a "loophole." Get in that damn sandbox and start playing nice with one another.
4. Makes people put down that damn People Magazine and quit worrying about Kim Kardashian and pay the ef attention to some economics.
There are of course other HUGE economic benefits to having a tax code that would be whittled down from 16,000 pages to a SOLE, SINGLE SIMPLE number, but the above is I think the most overlooked, perhaps never-considered benefit of a flat sales tax.
Now, out of the Republican contenders for the nomination, are there any advocating this?
No, even my man, Herman Cain, still has to complicate it unnecessarily by deriving taxes by three different sources. But it is a start.
I fear, however, even the average American voter isn't bright enough to multiply 9 by 3, and will thusly still be just as confused as with a 16,000 page tax code.
So why not just make it an even 27% and stop confusing the average American?